COMMISSIONER OF INCOME TAX Vs. MUMTAZ ALI

JUDGEMENT

(1.) IN pursuance of an application filed by the Department under Section 256(1) of the INcome-tax Act, 1961 (hereinafter to be referred to as "the Act"), the Tribunal has referred the following questions of law for the opinion of this court :

(2.) THE assessee is a partnership firm. It was enjoying the status of a registered firm till the assessment year 1973-74. THE present dispute relates to the assessment year 1974-75. THE accounting year relevant to this assessment year ended on March 31, 1974. Under Section 139(1) of the Act, the assessee was required to file its return of income on or before July 31, 1974, and the assessee did file the return on July 31, 1974. But the statutory declaration in Form No. 12 required to be filed within the time prescribed for filing the return for seeking continuation of registration as per Section 184(7) of the Act was filed out of time, i.e., on October 8, 1974. THErefore, there was a delay in filing the said declaration seeking continuation of registration. On being asked by the Income-tax Officer to explain the reason for the delay in filing the said declaration, the assessee stated in writing that the delay was caused because of the serious illness of one of the partners of the firm, Smt. Noor Jehan, who was under medical treatment. In support of the same, a medical prescription was also filed. THE Income-tax Officer did not feel satisfied with the cause advanced by the assessee for explaining the said delay and, therefore, he refused to allow continuation of registration to the firm for the assessment year in question. Accordingly, the Income-tax Officer assessed the assessee in the status of an unregistered firm.

(3.) THE questions at hand are no more res integra. Almost all the High Courts including this court had the occasion to deal with these questions. THE view taken by the majority of the High Courts including this court is that where the Income-tax Officer refuses to condone the delay in filing the declaration, contemplated under Section 184(7) of the Act (Form No. 12 as prescribed under the Rules) and thereby the firm becomes disentitled for continuation of registration for that particular assessment year, such an order is appealable either under Section 246(c) or under Section 246(j) of the Act or under both. In a catena of cases decided by this court it is the consistent view. THE earliest decision of this court on this point is in the case of Madhur Jalpan v. CIT [1983] 143 ITR 351. A contrary view has been taken by the Orissa High Court and the Kerala High Court in the case of CIT v. Pohop Singh Rice Mill [1981] 132 ITR 390 (Orissa) and in the case of CIT v. Pushpaka Travels [1985] 152 ITR 717 (Ker). This court, on a detailed consideration of the contrary view, has specifically dissented therefrom.